Over Labor Day weekend, amidst Americans' attempts to enjoy the waning days of summer, The New York Times published an article titled "Trump Officials Draft Plan to Pay At-Home Parents, Using Funds for Working Ones." Per the story, the administration's proposal would use funds from the Child Care and Development Fund (CCDF), which subsidizes daycare for working parents, to pay stay-at-home parents for their at-home childcare. 

My family could potentially qualify for the payment, but my wife and I understand that this program could jeopardize our children's future. While families may find these cash transfers helpful in the short-term, the cost of these transfers could exacerbate the US's already fiscally unstable situation. 

What This Proposal Could Look Like 

According to the Times article, the Trump administration is drafting a rule that would let some married households use CCDF funds to support a parent caring for their child at home. The other spouse would have to work at least 35 hours per week, and benefits would still be income-limited. Eligibility and payment terms would depend on final policy. 

The CCDF currently funds "center-based childcare providers" (daycares) as well as family childcare providers and in-home childcare, so long as these providers are licensed and meet state and local requirements applicable for professional caregivers. The proposed change would make a qualifying child's own parent eligible to receive the same support. 

Outside of these scant details, little is known about the proposal. A similar policy was, however, proposed in a Heritage Foundation report last January. Instead of using CCDF funds, the report proposes a separate Home Childcare Equalization credit. The hypothetical tax credit would add up to $2,000 per eligible child under five to Heritage's proposed Family and Marriage credit. Marriage and earned income would be required, and benefits received through the CCDF (as well as the child and dependent care tax credit) would reduce the proposed credits dollar for dollar. 

Heritage estimates that its two credits together would cost about $188.7 billion over ten years, and proposes other spending cuts to offset part of the cost. The new proposal will have its own budget consequences. Redirecting existing funds and creating additional benefits require different fiscal assessments. 

Greater Parental Choice, But Minimal Impact on Fertility 

Care provided by a parent has an economic cost even when no bill arrives. When one parent stays home, that parent likely gives up earnings as well as career advancement. For most, the trade-off is worthwhile. Interviews of highly educated mothers who choose to be stay-at-home parents to many children found these women "see maternity as a high-risk and high-reward endeavor, an ambitious-but-potentially-thrilling life project."  Furthermore, research on mothers' wellbeing strengthens the case for parental choice. A study of more than 2,000 mothers linked better wellbeing to employment arrangements that matched mothers' preferences. A separate longitudinal study found elevated depressive symptoms among unemployed mothers only when they wanted paid work. Offering greater choice for parents among existing funds may provide a silver lining: parents will be better able to pursue the career-family dynamic that best suits their needs and goals.